THE FEDERAL BUDGET 2020-21
Find the latest news on how The Federal Budget 2020-21 will affect you.
This year’s Budget is a mixture of bold action and routine tinkering. For the most part, the bold action is seen in the spending measures; the tax measures are relatively more cautious. That is not to say, the tax measures are cheap; the cost of accelerating the personal income tax cuts, the new equipment expensing regime and the loss carry-back measure are substantial. The equipment expensing and loss carry-back measures will be welcomed by business, but the assortment of other tax measures are modest and not especially eye-catching.
This Budget is about jobs, investment and the necessary steps Australia must take on the long road back to restore the economy to pre COVID19 levels. In this special edition we will mainly focus on tax measures impacting business and personal tax payers.
Key Highlights
The NSW Government has responded to one of the most challenging periods in our lifetimes with three back-to-back crises of severe drought, the 2019-20 summer bushfires and the COVID-19 pandemic. The budget is firmly focused on further economic stimulus, with economic reform being a longer-term objective.
Below, outlines key points to the The Budget 2020-21.
As part of the Covid-19 measures the NSW government previously increased the payroll tax threshold to $1 million. Perrottet, announced that the threshold will be further increased to $1.2 million. This will see 3,500 NSW business no longer having to pay payroll tax.
Additionally, the payroll tax rate will be temporarily cut from 5.45 per cent to 4.85 per cent for the next two years (2020-21 and 2021-22). These changes will take many small and medium businesses out of the payroll tax system and reduce the payroll tax burden on those businesses that continue to be subject to payroll tax.
However, even with the increased threshold and reduced tax rate, businesses should ensure that they have fully considered their potential payroll tax position. Issues such as the treatment of contractors, grouping of related employers and the impact of wages paid in other states regularly arise as part of NSW Revenue reviews.
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Small and medium size businesses, which do not pay payroll tax, will be provided with a $1,500 digital voucher that can be applied towards the cost of government fees and charges.
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The $250 million Jobs Plus Program aims to create or support 25,000 jobs between 15 December 2020 and 30 June 2022. Businesses that create (net) at least 30 new jobs in NSW will be eligible for payroll tax relief for up to a four-year period. This can be accessed by existing businesses in NSW that increase their employment footprint, or businesses that relocate operations to NSW from interstate or overseas.
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As a longer-term objective, the NSW government has signaled an intention to reform the property tax system which it describes as “inefficient”. The next step will involve seeking public feedback on a possible transition away from the current transfer duty and land tax system. The aim is to lower barriers to home ownership and boost long-term economic growth.
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The Government’s $74 billion JobMaker Plan is designed to support a stronger economic recovery and bring more Australians back to work. Creating jobs and boosting the skills of Australians to help them get back into work is at the heart of the Governments Economic Recovery Plan for Australia. The scheme will run for 12 months from 7 October 2020 until 6 October 2021, with registrations through ATO online services, the Business Portal, or through registered tax and BAS agents.
The scheme will see eligible employers able to access up to $200 per week for each eligible additional employee aged 16 to 29 years, and up to $100 per week for each eligible additional employee aged 30 to 35 years.
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